Latif Jameel Poverty Action Lab at M.I.T, and NBERThe poor can and do save, but often use formal or informal instruments that have high risk, high cost, and limited functionality. This could lead to undersaving compared to a world without market or behavioral frictions. Undersaving can have important welfare consequences: variable consumption, low resilience to shocks, and foregone profitable investments. We lay out five sets of constraints that may hinder the adoption and effective usage of savings products and services by the poor: transaction costs, lack of trust and regulatory barriers, information and knowledge gaps, social constraints, and behavioral biases. We discuss each in theory, and then summarize related empirical evidence, with a focus on recent field experiments. We then put forward key open areas for research and practice.JEL Codes: D12, D91, G21, O16

The poor can and do save, but often use formal or informal instruments that have high risk, high cost, and limited functionality. This could lead to undersaving compared to a world without market or behavioral frictions. Undersaving can have important welfare consequences: variable consumption, low resilience to shocks, and foregone profitable investments. We lay out five sets of constraints that may hinder the adoption and effective usage of savings products and services by the poor: transaction costs, lack of trust and regulatory barriers, information and knowledge gaps, social constraints, and behavioral biases. We discuss each in theory, and then summarize related empirical evidence, with a focus on recent field experiments. We then put forward key open areas for research and practice.JEL Codes: D12, D91, G21, O16

No abstract

Due to the increasing penetration of mobile phones even in poor communities, mobile-phone-enabled banking (m-banking) services are being increasingly targeted at the "unbanked" to bring formal financial services to the poor. Research in understanding actual usage and adoption by this target population, though, is sparse. There appear to be a number of issues which prevent low-income, low-literate populations from meaningfully adopting and using existing m-banking services. This paper examines variations across countries in adoption and usage of existing m-banking services by low-literate, low-income individuals and possible factors responsible for the same. It is observed that variations are along several parameters: household type, services adopted, pace of uptake, frequency of usage, and ease of use. Each of these observations is followed by a set of explanatory factors that mediate adoption and usage.

The idea of information and communication technology (ICT) being a "hammer" that can be applied to a wide variety of "nails" across different geographic locations, sectors, organizations, and contexts to improve efficiency and/or have a beneficial social impact has come under severe criticism, particularly in the realm of implementing socioeconomic development programs. Structuration theory remains one of the key metatheories that deconstruct the complexity of technology introductions in the context of organizational and behavioral change. In this study, we use a structurational lens to examine two pilot ICT implementations in the Indian microfinance sector, specifically exploring the interactions between the ICT intervention, the organizations and people implementing the change, and the structural and institutional context within which these projects were rolled out. We showcase how an "ICT for development" intervention is inherently a political process, involving choices around defining efficiency and targeting particular social welfare improvements, with varying repercussions for the involved microfinance institution and client. Where the client's context, constraints, and welfare are placed at the heart of the "efficiency" discussion during the technology's design and implementation, the development impact is seen to be far greater and more sustained. C 2009 Wiley Periodicals, Inc.